Exploring the Impact of Readability of Privacy Policies on Users' Trust

Empirical studies have repeatedly pointed out that the readability of a privacy policy is a potential source of trust of online users. Nevertheless, many online companies still keep the readability of their privacy policies at a low level. This could possibly coincide with a low compliance of their privacy policies with the guidelines of fair information practices and thus with users’ privacy expectations. Against this background, this study seeks to clarify the role of perceived and actual readability of user-friendly and -unfriendly privacy policies in shaping user’s trust in a mobile service provider. Tested for two different mobile service scenarios that differ in the sensitivity of user data (educational entertainment app vs. health app), our hypotheses are verified based on the responses of 539 online users. Our findings reveal that in the case of a user-unfriendly data-handling policy, the effect of actual readability of a privacy policy outweighs the effect of its perceived readability in forming users’ trust. At the same time, for a user-friendly privacy policy, only perceived readability plays a significant role in promoting users’ trust in the provider of an educational entertainment app. In a sensitive healthcare context, however, perceived and actual readability of privacy policies are almost equally important.